OREANDA-NEWS. August 02, 2011. Burwill Holdings Limited (the “Company”) is pleased to announce the latest operation update on Tai Xin magnetite iron ore mine in Laiyang City, Shandong Provincem, reported the press-centre of Burwill Holdings.

The relevant information will be reported in summary format and may not be comprehensive. Taking into consideration constraints such as market competition or confidential business information, the Company will provide updates on those matters which the management considers crucial to shareholders’ interest. Directors of the Company summarize those matters considered to be crucial as below:

Production Safety Inspection
Owing to the flooding incident of a mining company in Weifang City, Shandong Province, on 11 July 2011, the Shandong Provincial Administration on Production Safety has suspended all underground non-coal mining operations within the province since 12 July 2011 until improved safety measures are implemented. As such, the Committee of Production Safety in Yantai City has strengthened the safety assessment, inspection and supervision of all mining corporations. The no. 1 processing plant of the Company is undergoing safety inspection as well.

No. 2 Processing Plant
System testing has been completed. The Company is currently applying for Production Safety Permit and Environmental Impact Assessment. In view of the aforesaid incident, the Company has conducted a thorough safety inspection, and has proactively adopted precautionary measures. Since the aforementioned government departments are now inspecting the production safety situation in the whole province, the timeframe of obtaining safety production permit and passing environmental impact assessment remains uncertain.

Integration of Mining License
After the integration of exploration licenses of four independent mining tenements (Tiejiangzhuang, Lujiazhuang, Lijiabozi and Heshanpo), the Company is currently applying for an integrated mining license of the mining tenements mentioned above, and expects to obtain such mining license within the next few months. Once an integrated mining license obtained, the Company will be able to commence a large-scale mining in the related areas.

Exploration
The Company has started explorations in Lujiazhuang and Heshanpo tenements in July in line with the schedule. All explorations will last a few months. If higher-grade ore is found, the productivity and profitability of the two existing processing plants will be enhanced.

Maintenance of Mining Tenements
From January to June 2011, the Company has carried out topsoil stripping at various mining areas for a total of 600,000 cubic meters, paving the way for increasing volume of mining.

Technological Alteration
The Company plans to install tailings recovery machines in the two processing plants, expecting to generate a return of RMB 10 millions each year. As processing plants consume a large amount of electricity, it is planned to install an energy-saving facilities for the purpose of cost control by reducing electricity usage of 10% each year.

About Tai Xin Magnetite Iron Ore Mine in Laiyang City, Shandong Province:
Located in between Yantai and Qingdao, the mining area is 15 km northwest to the Laiyang City of Shandong Province, PRC. Transportation is convenient, supply of water and electricity are adequate. The topography in the area is beneficial for mining and tailings discharge. By the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC), the project has initially identified iron ore resources of 640 million tons. Exploration has been commenced gradually in three mining areas for which the resources level would then be potentially raised. The two processing plants built recently would reach annual processing capacity of 6.5 million tons of iron ore. Following further development of the mine, completion of the processing plants, and their commencement of production, economies of scale will be achieved, bringing a positive impact to the Burwill Group’s profit and business model.